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Wealth management: how it is evolving for the benefit of the user

Wealth Management: what it is and how it works

The term Wealth Management is used to refer to all professional wealth management services. There are different types with different degrees of innovation, but the objective remains the same as well as the target audience, which is usually made up of individuals with a good degree of financial education who wish to organize their assets in a profitable way.

Wealth Management: what is it?

It is not easy to give a clear and concise definition of this type of service that dealing  with the management of assets, since very often these are solutions that are developed to measure the needs of each individual client in order to better meet their requirements and at the same time take into account the precise market situation at the time of their request.

This type of advice must include financial expertise and, at the same time, a good knowledge of the world of investment. This combination, however, is not enough. To provide a good Wealth Management service, it is necessary to be comfortable in the world of finance, moving with ease through accounting services, retirement planning, legal, tax and estate planning, and even risk management.

Wealth management: what it’s for

Being aware of the type of advice we can get with this type of solution, it is easy to see why we can use it. In general, this is a consultancy for the management of assets, so anyone who has doubts about these can rely on those who provide this service by presenting their needs and expecting advice in order  to make their decisions. Usually those who use Wealth Management need very specialized advice and for situations that can lead to significant consequences from a financial point of view, so they prefer to have the point of view of an expert. For example, there are those who seek help in preparing a savings management plan, or to ensure the survival of their company, or to protect family and personal assets.

Wealth Management and Private Banking

Considered as the set of products and services dedicated to the management of savings, the Wealth management in our country has had a good success and until a few years ago was the prerogative of Private Banking services offered by banks. The latter, however, has peculiarities that make it different. In fact It includes a set of private financial and consulting services characterized by a high degree of standardization. It is just the opposite of Wealth Management, which wants to distinguish itself instead for the strong customization of the recommended solutions, as the users themselves show they want.

Wealth Management and Robo Advisor

In the panorama of Wealth Management, thanks to new technologies such as artificial intelligence and machine learning, robo-advisors have sprung up: financial advisors able to dispense financial or investment management advice directly online with little,if any, human input. The machines, or more precisely, the algorithms are executed by a software that uses them to distribute, manage and optimize the client’s assets, taking into account the client’s requests and any specific constraints, based on the calculation of risk and the desired return objective.

Usually one of the first choices that clients are asked to make is between offering strategies with passive asset allocation techniques or a management related to active asset allocation but they can also delve into the types of robo advisor for Wealth Management so as to decide which to trust. Here are the main ones:

  • human4robo advisor: the human has to only define the investable assets. The platform takes care of everything else in an almost totally automated way;
  • robo4human advisor: a human  must manage the portfolio: the platforms then act almost totally automated;
  • robo4strategy advisor: human advisors manage the platform and choose algorithms and technologies for customer profiling;
  • online advisor: investment decisions remain the responsibility of the user who operates through online platforms.
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